February 06, 2012

Why Won't Jennifer Budge?

Or you tell me that you have an app that generates $225 sales a week, saying the strategy "doesn't scale".

The real issue, of course, isn't social media or apps or whatever the fancy, shiny new tool is.

The real issue is "whether Jennifer will budge or not"?

Remember, I like to think of our ecosystem as a mix of three customers.

Judy, the 50-64 rural catalog shopping veteran.

Jennifer, the 35-49 year old online maven who hunts for the best deals.

Jasmine, the 18-34 year old social shopper who knows that information will "find her".

So, if you want fancy new channels to work, you really have two choices.

Recruit Jasmine, in large numbers.

Convince Jennifer to become Jasmine.

You're not going to move Judy into Jasmine territory ... at least not fast enough to matter.

Too often, we try to convince Jennifer to become Jasmine.

Too often, Jennifer doesn't want to become Jasmine, she wants to be Jennifer!

Once you code Judy, Jennifer, and Jasmine in the database, measure (or, as they say on Twitter, #measure) the percentage of each audience that switches in the next twelve months.

Here's an example:

Look at Jennifer. Jennifer doesn't want to become Jasmine, heck, she'd rather become Judy!

Look at Jasmine. Jasmine doesn't even want to be Jasmine, she's more likely to become Jennifer next year.

Customers are willing to try new channels, but sometimes they have a gravity for "moving backwards" to existing channels. This was very common in the 1995 - 2003 timeframe, when customers tried the online channel thanks to a whopping 30% off plus free shipping incentive, then back-tracked to old-school shopping for a period of time.

I see this trend, over and over and over again. When you see this trend, it means you have a customer base that does not want to change, they don't want your brand to innovate. Your customers want things as they always have been.

There are a lot of smart people out there who tell you that you must move into new channels ... or risk becoming obsolete. It's good advice, until you actually measure customer behavior. In this example, we demonstrated that customers do not want to change. When your customer doesn't want to change, you have a whole different set of strategic options to consider.

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Kevin Hillstrom, President, MineThatData

Kevin is President of MineThatData, a consultancy that helps CEOs understand the complex relationship between Customers, Advertising, Products, Brands, and Channels. Kevin supports a diverse set of clients, including internet startups, thirty million dollar catalog merchants, international brands, and billion dollar multichannel retailers. Kevin is frequently quoted in the mainstream media, including the New York Times, Boston Globe, and Forbes Magazine.

Prior to founding MineThatData, Kevin held various roles at leading multichannel brands, including Vice President of Database Marketing at Nordstrom, Director of Circulation at Eddie Bauer, and Manager of Analytical Services at Lands' End.

You may contact kevin at kevinh@minethatdata.com.

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